The Illinois Farm Policy News reported that China’s pork production had grown in the second quarter as thousands of new breeding farms last year came on line to rebuild a herd hit hard by African Swine Fever culls and deaths.
Quoting a Reuters story, the FPN said “China’s second-quarter pork production surged to its highest in at least seven years, official data showed on Thursday….
“Pork output for April-June was 13.46 million tonnes, up 40% compared with the same period last year and well abo ve the usual 10 million tonnes during this period, according to Reuters’ calculations based on official data. The National Bureau of Statistics said China’s pork output jumped 35.9% in the first half of 2021 versus a year earlier to 27.15 million tonnes.”
FPN said the Reuters article also said “sales data from 16 listed hog producers showed they produced 42.8 million hogs for slaughter in the first half, an increase of more than 100% over the prior year,” said Boya Consulting in a report on Wednesday. “But that surge in volume pressured live hog prices, which shed about 65% from January to June, leaving many with significant losses for the period.”
And, FPN said the Reuters story said analysts were watching a surge in ASF surge in Sichuan province that could trigger more panic slaughtering and pressure prices even more.
ERS SEES LOWER US PRODUCTION
Meanwhile, the USDA’s Economic Research Service said in its Feed Outlook Report that “the outlook for livestock inventories and implied demand for feed is lower in July, compared with the previous month. Total Grain Consuming Animal Units for 2021/22 are projected to be 101.3 million units, compared with the previous month’s projection of 101.8 million,” the FPN said.
“The current projection compares with 2020/21 estimates at 101.5 million units in July – which was estimated at 101.8 million units a month ago,” the ERS said. The month-to-month reduction is primarily due to a 0.5-million-unit reduction from the hog sector, based on the latest indications from the Quarterly Hogs and Pigs Report.”
However, “while the latest forecasts are reduced from the previous month, GCAUs remain relatively large by historical standards,” the FPN quoted the ERS as saying. “Prior to the current peak of 101.9 million units in 2019/20, animal units averaged 98.4 million units from 2016/17 to 2018/19.”
And, pork prices are up along with inflation in other food items. This is being blamed on an increase in consumer demand for grilling and a rise in restaurant demand as COVID restrictions are lifted.
There is pent-up demand for gatherings and eating out from the pandemic closures and restrictions, a market analyst said.
CATTLE, BEEF RECAP
Fed cattle traded last week at $119 to $125 per cwt on a live basis, steady to down $1 from the previous week. Dressed-basis trade was at $196 to $201, steady to down $1.
The USDA choice cutout Tuesday was down $1.61 per cwt at $264.88, while select was off $0.91 at $248.58. The choice/select spread narrowed to $16.30 from $17.00 with 112 loads of fabricated product and 41 loads of trimmings and grinds sold into the spot market.
The USDA reported Tuesday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.07 to $1.15 a bushel over the Sep futures and for southwest Kansas were unchanged at $0.70 over Sep, which settled at $5.71 3/4 a bushel, up $0.15 3/4.
The CME Feeder Cattle Index for the seven days ended Monday was $150.90 per cwt up $0.42. This compares with Tuesday’s Aug contract settlement of $155.52 per cwt, down $1.85.